This is a standard requirement for ANY asp.net website that needs permissions to edit parts of a site.

DNN needs access to the ROOT folder since the installation module needs to have access to the web.config file.  It can make changes to this file for a number reasons - and also uses the same file to force an application pool restart.

As for security risks - to be honest this is a bit of a misnomer - and more comes down to a lack of understanding of asp.net and IIS configuration on the part of your host.

Saying you CANT has the permissions you need it just a lazy way out for your host . . .  You NEED full read/write permission for which ever user your host assigns and the owner of the application pool your site is connected to.

IF the hosting is running IIS 7.x then they should have assigned your application pool to the AppPoolUser by default -  IT IS THEN this special user that needs full READ/WRITE access to your web site -  AND since this user is unique to your web site their is NOT security issue.

IF they cant do what you need - its time to look at any of the number of hosts that have not problems with this sort of thing - and in most cases assign such permissions automatically . . . because they UNDERSTAND that there is not security risk

Westa 

What hosts would you recommend that don't have these restrictions? I've had problems with Godaddy and now HostGator.